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EMC Corp (NYSE:EMC)
Beneish M-Score
-2.88 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

EMC Corp has a M-score of -2.88 suggests that the company is not a manipulator.

EMC' s 10-Year Beneish M-Score Range
Min: -3.74   Max: -1.85
Current: -2.88

-3.74
-1.85

During the past 13 years, the highest Beneish M-Score of EMC Corp was -1.85. The lowest was -3.74. And the median was -2.76.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of EMC Corp for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.944+0.528 * 1.0043+0.404 * 1.0447+0.892 * 1.054+0.115 * 0.9671
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0364+4.679 * -0.0812-0.327 * 1.0939
=-2.88

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Mar15) TTM:Last Year (Mar14) TTM:
Accounts Receivable was $2,966 Mil.
Revenue was 5613 + 7049 + 6032 + 5880 = $24,574 Mil.
Gross Profit was 3339 + 4505 + 3743 + 3654 = $15,241 Mil.
Total Current Assets was $12,563 Mil.
Total Assets was $43,293 Mil.
Property, Plant and Equipment(Net PPE) was $3,742 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,892 Mil.
Selling, General & Admin. Expense(SGA) was $8,167 Mil.
Total Current Liabilities was $10,481 Mil.
Long-Term Debt was $5,495 Mil.
Net Income was 252 + 1146 + 587 + 589 = $2,574 Mil.
Non Operating Income was 34 + -106 + -74 + -31 = $-177 Mil.
Cash Flow from Operations was 1080 + 2231 + 1700 + 1254 = $6,265 Mil.
Accounts Receivable was $2,981 Mil.
Revenue was 5479 + 6682 + 5539 + 5614 = $23,314 Mil.
Gross Profit was 3347 + 4224 + 3442 + 3509 = $14,522 Mil.
Total Current Assets was $14,195 Mil.
Total Assets was $44,047 Mil.
Property, Plant and Equipment(Net PPE) was $3,568 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,716 Mil.
Selling, General & Admin. Expense(SGA) was $7,476 Mil.
Total Current Liabilities was $9,365 Mil.
Long-Term Debt was $5,494 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2966 / 24574) / (2981 / 23314)
=0.12069667 / 0.12786309
=0.944

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(4505 / 23314) / (3339 / 24574)
=0.62288754 / 0.62020835
=1.0043

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (12563 + 3742) / 43293) / (1 - (14195 + 3568) / 44047)
=0.62338022 / 0.59672622
=1.0447

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24574 / 23314
=1.054

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1716 / (1716 + 3568)) / (1892 / (1892 + 3742))
=0.32475397 / 0.33581825
=0.9671

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(8167 / 24574) / (7476 / 23314)
=0.33234313 / 0.32066569
=1.0364

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5495 + 10481) / 43293) / ((5494 + 9365) / 44047)
=0.3690204 / 0.3373442
=1.0939

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(2574 - -177 - 6265) / 43293
=-0.0812

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

EMC Corp has a M-score of -2.88 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

EMC Corp Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 1.02971.0431.14970.86820.99281.00450.97221.0771.05151.086
GMI 0.95311.01370.97250.98611.0010.93660.96930.96841.00770.9989
AQI 0.86181.06980.83831.01811.13871.14640.96271.03850.91131.0507
SGI 1.17431.15431.1861.12440.94281.21311.17591.08531.06941.0525
DEPI 1.03191.06790.91550.92490.99051.03020.94551.02181.010.9778
SGAI 0.9791.08151.01411.04591.05920.96421.02510.9960.97971.0336
LVGI 1.13461.69210.92060.97520.89460.98871.00110.88881.39360.9941
TATA -0.0752-0.0608-0.0832-0.0943-0.0839-0.0846-0.0886-0.0878-0.0824-0.0775
M-score -2.77-2.78-2.63-2.94-2.85-2.64-2.81-2.71-2.91-2.70

EMC Corp Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
DSRI 1.0770.97411.01230.87341.05151.01060.98741.01781.0860.944
GMI 0.96830.97740.99320.99661.00781.00841.00781.00750.99891.0043
AQI 1.03851.03290.89390.90510.91130.99131.12241.07841.05071.0447
SGI 1.08531.07381.06441.06171.06951.05941.0571.06661.05251.054
DEPI 1.02181.01921.02621.0341.011.01180.99040.96940.97780.9671
SGAI 0.99610.99210.98950.99180.97950.99851.02111.02141.03371.0364
LVGI 0.88880.98841.35961.36541.39361.29020.9590.95260.99411.0939
TATA -0.0863-0.0864-0.0737-0.0823-0.0824-0.0817-0.084-0.0798-0.0775-0.0812
M-score -2.70-2.83-2.92-3.08-2.91-2.89-2.77-2.73-2.70-2.88
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